Fractional CMO Insights Survey: Why Businesses Hire Them & How to Become One

Fractional CMO Insights Survey: Why Businesses Hire Them & How to Become One written by John Jantsch read more at Duct Tape Marketing

Did you know nearly half of all marketers are now offering fractional CMO services? Our latest Fractional CMO Insights survey reveals the skills driving this boom, the industries reaping the biggest benefits, and what it takes to land your ideal client (or become the fCMO everyone wants). Whether you’re a business seeking growth, a seasoned marketer considering […]

Premium Pricing for Professional Services written by Shawna Salinger read more at Duct Tape Marketing

Are you tired of the race to the bottom in pricing your professional services? Pricing is tough and it pushes many to commoditization. There’s a better route: premium pricing. Charging a premium elevates your services above the price wars but also transforms the very nature of your client relationships.

In this post, I’ll share keys to a premium pricing strategy for your professional services. After reading this, you’ll understand the role of messaging and how to build long-term client relationships. You won’t just be adding a few dollars to your rates; you’ll completely change how you’re perceived in the marketplace and how you deliver your services.

Table Of Contents:

• Eliminate Commodity Thinking in Your Pricing Strategy
  • The Impact on Pricing Strategies
• Premium Pricing Approach: Selling Solutions, Not Hours
  • Offering Complete Solutions
  • Implementing Premium Pricing
• Premium Pricing Through Trust and Value
  • Crafting Productized Packages
  • The Role of Initial Engagements in Building Trust
  • Establishing Long-term Client Relationships
• Becoming a Premium Brand
  • Creating Brand Loyalty Through Transformational Relationships
  • Strategies for Cultivating Customer Loyalty
• High Value Messaging for Premium Pricing
  • Empathy as a Marketing Strategy
  • Marketing to High Value Clients

                                                       

Eliminate Commodity Thinking in Your Pricing Strategy

When you start treating your services like they’re just another product on the shelf, you’re headed down a slippery slope. Commodity thinking is by far one of the most common pricing tactics out there and is a surefire way to get stuck in a race to the bottom. 

If you want to charge premium rates and stand out in your market, you’ve got to shift your mindset and eliminate commodity thinking.

So, what exactly is commodity thinking? It’s when you start viewing your services as interchangeable with everyone else’s. With this approach, you’ll be selling packages that focus more on a certain set of deliverables than a strategic solution. 

The Impact on Pricing Strategies

When you treat your services like a commodity, it has a big impact on your pricing strategies. You start feeling pressure to lower your rates to compete with everyone else. 

But that’s a losing game. You end up working harder for less money, and it’s tough to sustain long-term. If you want to charge premium prices, you need to break free from commodity thinking and focus on providing a valuable solution. Often, it’s fear that holds people back from charging premium rates, because it’s scary to be different from everyone else.

Premium Pricing Approach: Selling Solutions, Not Hours

In the professional services realm, the traditional billing model has long been trading time for dollars. But here’s a transformative thought: what if instead of selling hours, we sold solutions? 

When you trade time for dollars, you inherently limit your growth. There’s a cap to how many hours you can work and, consequently, how much you can earn. 

More critically, this model positions your services as a commodity, where the only differentiator becomes your hourly rate. It’s a precarious position that invites price comparison and undermines the unique value you bring to your clients.

Offering Complete Solutions

Selling complete solutions means focusing on the outcome you deliver, not the hours of work it takes to get there. It’s about understanding the profound challenges your clients face and offering a packaged solution that addresses these challenges head-on. This approach doesn’t just elevate your services; it makes you an indispensable partner in your client’s success.

Here are a few key benefits of selling solutions over time:

Value Perception: Your clients aren’t just paying for your time; they’re investing in a result that has a tangible impact on their business or life. This shifts the conversation from cost to value.

Scalability: Solutions can be scaled and replicated across clients without directly increasing your workload. This opens the door to exponential growth that isn’t possible when you’re limited by the number of billable hours.

Differentiation: By offering a complete solution, you differentiate your services based on the unique outcomes you deliver. This sets you apart in a crowded market where many are still selling time.

Implementing Premium Pricing

Making the transition from selling time to selling solutions begins with a deep dive into understanding your clients’ needs and the challenges they face. It involves productizing your services in a way that clearly articulates the end result and the path to get there. 

It also requires confidence in the value you provide, allowing you to price based on impact rather than effort. Lack of understanding is a top customer complaint when it comes to professional services. If you can demonstrate that understanding, you’ll have a major competitive advantage.

Premium Pricing Through Trust and Value

In order to command premium pricing, you’ve got to build trust with your clients and demonstrate the value you bring to the table.

One effective way to do this is by creating productized packages that offer clear value propositions. When clients can see exactly what they’re getting for their money, they’re more likely to invest in your services.

Crafting Productized Packages

To create a productized package, start by identifying a specific problem or need that your target clients have. Then, develop a solution that addresses that problem in a comprehensive way.

Your package should include all the elements needed to achieve the desired outcome, whether that’s a certain number of consulting hours, a set of deliverables, or access to specific resources.

The Role of Initial Engagements in Building Trust

Initial engagements are another great opportunity to build trust and set the stage for premium pricing. When you knock it out of the park on one project, clients are more likely to invest in an ongoing engagement.

Use these initial projects to demonstrate your expertise, reliability, and value. Aim to provide outstanding results, and you’re on your way to justifying those top-tier prices.

Establishing Long-term Client Relationships

Finally, don’t underestimate the power of long-term client relationships in sustaining premium pricing. When you build strong, ongoing partnerships with your clients, they’re more likely to see the value in your services over time.

Aim to always bring your A-game and knock customer service out of the park. Check in regularly to ensure you’re meeting their needs and exceeding their expectations.

By creating a productized package with a clear value proposition and set pricing, you can attract clients and build trust. And by developing that trust through an initial engagement, you can lay the foundation for long-term client relationships and recurring revenue.

Becoming a Premium Brand 

If you want to charge premium prices, you can’t focus on transactions. You’ve got to build real, meaningful relationships with your clients. 

This is how you become a premium brand – a must, since brand-based referrals are a limitless source of clients, if you can get them. 

Creating Brand Loyalty Through Transformational Relationships

Transactional relationships are all about the here and now. You provide a service, the client pays you, end of story. There’s no real depth or ongoing connection.

But transformational relationships? That’s where the magic happens. You become more than just a service provider – you’re a trusted partner invested in your client’s success.

And here’s the thing: clients are willing to pay a premium for that kind of relationship. When you’re truly in their corner, price becomes less of an issue. They know your value.

Strategies for Cultivating Customer Loyalty

So how do you build these game-changing relationships? It starts with really listening to your clients. Don’t just hear their words – dig into their challenges, goals, and aspirations.

Show up consistently. Be responsive and reliable. Anticipate their needs and go the extra mile to deliver. Continuously look for ways to add value beyond the scope of your engagement.

Invest in your clients’ growth. Let others in on what you know, connect them with the right people at the right time, and don’t hold back on celebrating their successes. Show that you’re not just there to invoice them – you’re genuinely invested in their success.

There is less competition in charging premium pricing for professional services compared to lower price points.

Remember, transformational relationships take time. But when you get them right, you’ll have clients who stick with you, advocate for you, and happily pay your premium prices. That’s the power of going beyond transactions.

High Value Messaging for Premium Pricing

Your pricing is premium, and your messaging should be too. The way you communicate your value plays a huge role in justifying those premium price tags.

But here’s the key: it’s not about you. The most effective messaging is all about your client. Let’s dive into how empathy and targeted communication can be your secret weapons for premium pricing success.

Empathy as a Marketing Strategy

Empathy is everything. Put yourself in their shoes. What keeps them up at night? What does success look like for them? 

The more you can empathize with their situation, the better positioned you’ll be to communicate your value.

When your messaging comes from a place of genuine understanding, it resonates on a deeper level. Clients feel heard, understood, and confident that you’re the right partner to help them achieve their goals.

Marketing to High Value Clients

Generic messaging just won’t cut it. To nail that higher price point, your messaging has got to hit the bullseye with the people you’re really trying to reach.

Speak their language. Use the words, phrases, and examples that resonate with them and their specific challenges. Show that you “get” them on a fundamental level.

Highlight the outcomes and transformations you help clients achieve. Paint a vivid picture of what success looks like – and how your premium services are the key to getting there.

Use case studies, testimonials, and storytelling to bring your value to life. Show the real, tangible impact you’ve had on clients just like them.

Keep in mind, getting your message across isn’t about showing off or trying to be too cute. It’s about communicating your value in a way that deeply resonates with your target audience and makes your premium pricing feel like a no-brainer.